Had global liquidity conditions not been as ample as they had been over the past several years, Turkey would not have been able to run the outsized external imbalances that it has managed to run, nor would its corporate sector have been able to incur as large a U.S. dollar denominated debt as its corporate sector has built up.

...

Closer to home, Turkey's present economic debacle might remind us that there comes a day of reckoning for reckless macroeconomic policies. This would seem particularly pertinent in the current U.S. context where a massive unfunded tax cut together with public spending increases are expected to give rise to budget deficits in excess of 5 percent of GDP for as far as the eye can see.

It would be fanciful to think, as the Trump administration seems to do, that these budget deficits will not lead to a widening in the U.S. external current account deficit or that these deficits can be financed indefinitely without a dollar crisis at some point.''